South African Funding and

Coproduction Landscape

SOUTH AFRICAN FILM INDUSTRY – WHY SHOOT IN SA?

• The South African film industry is largely located in three main

provinces namely:

• Gauteng,

• Western Cape and

• KwaZulu-Natal.

• Gauteng is dominant in the television and local content

space,

• Western Cape accounts for a large market share of the co-

production and international film production as well as

other film related activity particularly commercial

productions.

• Great Locations - the world in one country

• World class crews

• World class facilities including sound stages and global gear

houses

SA COPRO TREATIES OVERVIEW

CANADA

•1997

•80/20

ITALY

•2003

•80/20

GERMANY

•2004

•80/20

UK

•2007

•80/20

FRANCE

•2010

•80/20

AUSTRALIA

•2010

•80/20

NEW ZEALAND

•2011

•80/20

IRELAND

•2012

•80/20

BRAZIAN TREATY DRAFTED. TO BE SIGNED AND

LEGISLATED

CANADIAN –SA COPRO TREATY

Co-Production Application

•The application procedure for a film to qualify as an official co-production has two steps:

Step 1

•Each co-producer needs to apply for an Advance Ruling from the relevant authority in their home country at least 30 days before principal photography.

Step 2

•At the end of the production an application for Final Ruling must be completed and submitted together with the required documentation.

FUNDERS OVERVIEW

•Rebate

DTI (Trade and Industry Ministry)

•Equity, Guarantees and Gap

IDC (Development Bank)

•Grants for development & production

NFVF (National Film Fund)

•Soft Grants

Film Commissions

•Tax Relief on Revenue

Tax Law

•Distributors and Broadcasters

Pre-Sales and MGs

Private/Brands/CSI

Basics

50% of principal photography in SA and a minimum of 2 weeks

Minimum budget (TPE) $250,000 and QSAPE 75% of TPE

Rebate is 35% of QSAPE up to $600,000. 25% thereafter

Must apply before commencing principal photography

Can be paid out in 5 (20%) milestones

Eligibility

FORMATS : Feature films, Telemovies, Television drama series or mini series, Documentary or documentary mini series, Animation

Approved Co-production by the Minister of Arts and Culture

Apply to NFVF :

1. Application - Advance ruling

2. Claim – Final ruling

The Department of Trade and Industry (DTI)

- SA and official co-pro treaty production

Basics

50% of principal photography in SA and a minimum of 4 weeks

Minimum QSAPE of $1,2M

Rebate : 20% of QSAPE . No Cap will apply

Must apply before commencing principal photography

No milestones only rebate after completion

Post Production

Post production with a QSAPPE of $150,000 and more

Minimum of 2 weeks of post production to be carried in SA

If 100% of Post Production is conducted in SA, minimum requirement for number of weeks will be waived

Foreign post-production with QSAPPE of $150,000, the incentive is calculated at 22,5% of QSAPPE

Foreign post-production with QSAPPE of $300,000 and above the incentive is calculated at 25% of QSAPPE

The Department of Trade and Industry (DTI)

- Foreign Film and Television Production Incentive

Basics

IDC can take up to 49% equity in a commercially viable project

Funding between $100,000 and $100M

Average participation around 20%

Only fund local productions and co-productions

Prefer funding pre-sales

Require external script approval

Types of Funds

debt/equity

quasi-equity

guarantees

trade finance

bridging finance

venture capital

Industrial Development Corporation (IDC)

Basics

NFVF are the national film body

Supports the development and production of feature films, documentaries, shorts and animation

Provides grant of up to $120,000 on features

Provides grant of up to $30,000 on documentaries

Recoup grant on start of principle photography

Only fund SA productions and treaty co-productions

Treaty Process

NFVF initiate and draft the co-production treaties

NFVF are the custodians of the treaties and verify all official co-production applications

1. Application - Advance ruling

2. Claim – Final ruling

The National Film and Video Foundation (NFVF)

Provincial Film Commissions

Gauteng Film Commission (GFC)

•Soft Grants between $3,000 and $100,000

•Production or post production must in the province of Gauteng

•Permitting in Gauteng

Kwazulu-Natal Film Commission

(KZNFC)

•Soft grants of $60,000 to $120,000

•Production and post production must be in the province of Kwazulu-Natal

•Permitting in Kwazulu-Natal

WESGRO

•No grants currently

•Permitting in the Western Cape

Basics

Income must be derived from a film

The film must be approved as a local film or co-production

Income must be allocable to the initial investors

Income must be derived from exploitation of rights

Income must fall within a 10 year period

Incentive Benefits

Income derived from the film will not be taxed

The South African Revenue Service : Tax incentive 12 O

PRE-SALES/MINIMUM GUARANTES

Distributors

•Ster Kinekor – From $30,000 up to $250,000

•Time Media Distribution – From $30,000 up $250,000

•Indigenous Films Distribution – No MGs

•UIP – MG unknown

•Videovision –MG Unknown

Exhibitors

•Avalon Group

•Ster-Kinekor

•Nu Metro

•Independents:

•The Bioscope (Johannesburg)

•The Labia (Cape Town)

Broadcasters

•DSTV (MNET) –Satellite PayTV : Pre-Sales between $150,000 and $300,000 for local and co-productions, Acquisitions around $20,000

•Star Sat – Satellite PayTV : No pre-sales, Acquisitions around $2,000

•ETV – Free to air private : Pre-sales starting $5,000. Acquisitions starting around $1,000

•SABC 1,2&3 – Free to air public : Pre-sales rare starting around $20,000, acquisitions starting around $8,000

Sales Agents

•AAA Entertainment

•Crystal Brooke

•Videovision

•Previously disadvantaged Productions

•Fireworx Media

•Shadow Films

SASFED – South African Screen Federation

IPO – Independent Producers Organisation

DFA – Documentary Filmmakers Association

PMA - The Personal Managers' Association

SACIA - The Southern African Communications Industries Association

SAGE - South African Guild Of Editors

WGSA - Writers' Guild of South Africa

ATFT – The Association for Transformation in Film and Television

Trademark – South African Indies

YPF – Young Producers Forum

SAFACT - The Southern African Federation Against Copyright Theft

GUY MCLAUD – ENTERTAINMENT LAWYER

INDUSTRY ORGANISATIONS AND OTHER RESOURCES